Lego profit less awesome as US sales stall

Danish toymaker Lego on Tuesday reported slower sales growth and falling profits in the first half as it hired more staff and sales stalled in the Americas.

Lego profit less awesome as US sales stall
Lego CEO Jørgen Vig Kundstorp. Photo: Fabian Bimmer/File Photo/Scanpix
Net profit fell to 3.49 billion kroner (€469 million, $524 million), from 3.55 billion kroner in the same period last year.
Revenue growth was still in double digits at 11 percent to 15.69 billion kroner, but it increased at less than half the pace it did a year ago.
“Maintaining double-digit growth year on year through more than a decade is a testament to the never ending possibilities that children find in Lego play,” chief executive Jørgen Vig Knudstorp said in a statement.
Earnings took a hit as the group grew its workforce by 3,500 employees — meaning it now has 18,500 staff — and invested in a new factory in China and also expanded existing manufacturing plants in Mexico and Hungary.
Sales grew by double digits in the European and Asian markets but were flat in the Americas.
“We have had three years where we've had some supply challenges in the US and what we needed to do on the back half of 2015 was to slow some of our demand levels in order to ensure that we didn't have shortages… at the end of December,” chief financial officer John Goodwin told AFP.
The company was now working on marketing measures and with retailers to stimulate demand in the US market ahead of the holiday season, he added.
Among the biggest sellers were well-established lines like Lego City and Lego Star Wars, and a new product launch from this year called Lego Nexo Knights, a futuristic range that mixes medieval elements with science fiction.
Privately held Lego has outpaced the rest of the toy industry for several years, defying the rising popularity of mobile phones and tablets.
In the first half of the year, the company was the world's largest toy maker as its revenue surpassed US rivals Mattel and Hasbro, but in the past the Danish group has lost that spot during the all-important Christmas season.

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Denmark’s toy giant Lego offers staff bonus after bumper year

Danish toymaker Lego, the world's largest toymaker, Denmark's Lego, said on Tuesday it will offer its 20,000 employees three extra days of holiday and a special bonus after a year of bumper revenues.

Lego is rewarding staff with a Christmas bonus and extra holiday after a strong 2022.
Lego is rewarding staff with a Christmas bonus and extra holiday after a strong 2022. File photo: Ida Guldbæk Arentsen/Ritzau Scanpix

Already popular globally, Lego has seen demand for its signature plastic bricks soar during the pandemic alongside its rapid expansion in China.

“The owner family wishes to… thank all colleagues with an extra three days off at the end of 2021,” the company said in a statement.

The unlisted family group reported a net profit of more than 6.3 billion Danish kroner (847 million euros) for the first half of 2021.

Revenues shot up 46 percent to 23 billion kroner in the same period.

It had been “an extraordinary year for the Lego Group and our colleagues have worked incredibly hard,” said the statement, which added that an unspecified special bonus would be paid to staff in April 2022.

Lego, a contraction of the Danish for “play well” (leg godt), was founded in 1932 by Kirk Kristiansen, whose family still controls the group which employs about 20,400 people in 40 countries.

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